Driven by the digital economy, dismantling the institutional and structural barriers that constrain the mobility of rural migrant workers is crucial for reducing income inequality and promoting urban-rural integration. Using six waves of data from the China Family Panel Studies (CFPS) from 2012 to 2022, this study empirically examines the impact of rural migrant workers’ mobility on individual income inequality in the context of the digital economy. The regression results show that cross-regional mobility among rural migrant workers significantly reduces individual income inequality. The mechanism analysis indicates that, at the macro level, the industrial transformation and upgrading induced by the digital economy improves the efficiency of factor allocation through labor mobility. Industrial digitalization enables rural migrant workers to reduce income inequality through cross-regional mobility. At the micro level, the empowerment effect of labor-job matching during migration plays an important role in enhancing individuals’ human capital accumulation and reducing income inequality. Labor mobility reduces income inequality by facilitating individuals’ transition into non-routine occupations and improving skill-job matching. The heterogeneity analysis reveals that rural migrant workers’ mobility trajectories in the labor market shape their income-generating capacity, socioeconomic status, and welfare throughout their individual development. In the long run, both county-based mobility trajectories, which represent a pattern of localized urbanization, and orderly long-distance mobility trajectories, which represent a pattern of off-site urbanization, significantly reduce income inequality among rural migrant workers. In the coordinated advancement of new-type urbanization and rural revitalization, the resource-allocation effects of labor mobility should be fully leveraged, and the orderly movement of rural migrant workers should be guided. In this way, common prosperity can be promoted more effectively, and the sustainable development of rural migrant workers can be advanced.